EXPLANATORY STATEMENT
Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2010
The Social Security (Administration) (Vulnerable Welfare Payment Recipient) Principles 2010 (the Principles) are made under subsection 123UGA (2) of the Social Security (Administration) Act 1999 (the Act). The Minister for Families, Housing, Community Services and Indigenous Affairs, as well as making the Principles in her own capacity, is also making them on behalf of the Minister for Education and the Minister for Employment and Workplace Relations.
Background
The Social Security and Other Legislation Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Act 2010 (the Amending Act) amended Part 3B of the Act to provide the basis for a national welfare reform initiative aimed at supporting disengaged and vulnerable welfare recipients in disadvantaged locations across Australia. Three new income management measures have been introduced, to be used in selected locations in Australia, covering:
- people aged 15 to 24 who have been in receipt of Youth Allowance, Newstart Allowance, Special Benefit or Parenting Payment for more than 12 weeks in the last 26 weeks (the disengaged youth measure); and
- people aged 25 and above (and younger than Age Pension age) who have been in receipt of Youth Allowance, Newstart Allowance, Special Benefit or Parenting Payment for more than 52 weeks in the last 104 weeks (the long-term welfare payment recipient measure); and
- people assessed by the Secretary as requiring income management for reasons including vulnerability to financial crisis or economic abuse (the vulnerable welfare payment recipient measure).
These Principles have been made for the purposes of the new vulnerable welfare payment recipients measure.
Purpose
Under subsection 123UGA(1) of the Act, the Secretary may determine that a person is a ‘vulnerable welfare payment recipient’ for the purposes of the new vulnerable welfare payment recipients measure in section 123UCA of the Act (the new measure).
If the Secretary makes such a determination, the person may be subject to income management under the new measure if the other conditions in section 123UCA are satisfied in relation to the person.
Subsection 123UGA(2) of the Act provides that, in making a determination that a person is a ‘vulnerable welfare payment recipient’ under subsection 123UGA(1) of the Act, the Secretary must comply with any decision‑making principles set out by the Minister in a legislative instrument.
The Secretary may vary or revoke a determination that a person is a ‘vulnerable welfare payment recipient’, under subsection 123UGA(5) of the Act. Subsection 123UGA(6) of the Act provides that, in deciding whether to vary or revoke a determination that a person is a ‘vulnerable welfare payment recipient’, the Secretary must comply with any decision-making principles set out by the Minister in a legislative instrument.
This instrument sets out the decision-making principles that the Secretary must comply with in making a determination that a person is a ‘vulnerable welfare payment recipient’ and in varying or revoking such a determination. Specifically, these Principles provide that the Secretary is required to consider a number of matters in making such a determination, and in varying or revoking such a determination.
The Principles are a legislative instrument, and commence on 9 August 2010.
Explanation and effect of provisions
Part 1 (sections 1 to 4) of the Principles sets out provisions of a technical nature.
Section 1 sets out the title of the Principles.
Section 2 provides that the Principles commence on 9 August 2010.
Section 3 contains definitions and interpretation provisions that are relevant to the Principles.
Of particular significance, subsection 3(2) sets out the circumstances that are ‘indicators of vulnerability’ for the purposes of the Principles. This term is relevant in the context of Parts 2 and 3 of these Principles, which are explained in detail below. In general terms, in deciding whether to determine that a person is a ‘vulnerable welfare payment recipient’ (under subsection 123UGA(1) of the Act), and in deciding whether to vary or revoke such a determination (under subsection 123UGA(5) of the Act), the Secretary must consider whether the person is experiencing one of the circumstances set out in subsection 3(2). That is, the Secretary must consider whether the person is experiencing an ‘indicator of vulnerability’ as defined in subsection 3(2) of these Principles.
Subsections 3(3), 3(4) and 3(5) of the Principles are interpretation provisions that provide an explanation of when a person is experiencing ‘financial exploitation’ (subsection 3(3)), ‘financial hardship’ (subsection 3(4)) or ‘homelessness or risk of homelessness’ (subsection 3(5)) for the purposes of these Principles. ‘Financial exploitation’, ‘financial hardship’ and ‘homelessness or risk of homelessness’ are ‘indicators of vulnerability’ (as defined in subsection 3(2)).
Of note, ‘financial hardship’ has been defined in subsection 3(4) so that the amount of income that is available to the person is not the only factor that is relevant to whether a person is experiencing financial hardship. This approach has been adopted to ensure that people whose only source of income is a welfare payment are not taken to be in ‘financial hardship’ only because of the limited financial resources that are available to them.
Subsection 3(5) sets out three broad circumstances in which a person is taken to be experiencing homelessness or risk of homelessness. Examples of these circumstances include:
- where a person is sleeping outdoors (‘sleeping rough’) or is sleeping in an abandoned or untenanted building (‘squatting’);
- where a person lives in, or moves between, temporary accommodation with friends or family, or temporary accommodation provided by a charitable organisation;
- where the accommodation that the person has access to damages, or is likely to damage, their health;
- where the accommodation that the person has access to threatens, or is likely to threaten, their safety; and
- where the accommodation that the person has access to does not provide the person with access to a reasonable level of personal amenities.
Section 4 sets out the purpose of the Principles, explaining the function of Parts 2 and 3 of the Principles.
Part 2 (section 5) of the Principles sets out the decision-making principles that the Secretary must comply with in making a determination, under subsection 123UGA(1) of the Act, that a person is a ‘vulnerable welfare payment recipient’.
Part 3 (section 7) of the Principles sets out the decision-making principles that the Secretary must comply with in deciding whether to vary or revoke a determination made under subsection 123UGA(1) of the Act.
Subsection 5(1) lists the matters that the Secretary must consider in making a decision about a person under subsection 123UGA(1) of the Act. Subsection 5(1) is expressed to be subject to subsections (2), (3) and (4).
The effect of subsections 5(2) and (3) is to limit the circumstances in which the Secretary is required to consider all of the matters set out in subsection (1), while subsection 5(4) provides that the Secretary is required to have regard to certain matters as part of the Secretary’s consideration under subsection (1). These requirements are explained in more detail below.
The first requirement, under paragraph 5(1)(a) of the Principles, is that the Secretary must consider whether the person is experiencing an indicator of vulnerability (as defined in subsection 3(2)). The specified indicators of vulnerability are those that it is considered could be assisted by income management.
A person may be experiencing more than one indicator of vulnerability at a time: for example, a person may be homeless and may also be experiencing financial exploitation.
Subsection 5(2) provides that, if the Secretary is satisfied that the person is not experiencing an indicator of vulnerability, the Secretary is not required to consider any of the other matters mentioned in subsection 5(1).
If the Secretary concludes that a person is not experiencing any indicators of vulnerability, it would not be appropriate for the person to be subject to income management under the vulnerable welfare payment recipient measure. If the Secretary is of the view that the person’s circumstances could be assisted by income management, it would be appropriate for the Secretary to consider whether another income management measure is relevant, including voluntary income management.
The second requirement, under paragraph 5(1)(b) of the Principles, is that the Secretary must consider whether the person is applying appropriate resources to meet some or all of their relevant priority needs. (As mentioned above, because of subsection 5(2), the Secretary is not required to consider this matter if the Secretary is satisfied that the person is not experiencing an indicator of vulnerability.)
By virtue of the definition in subsection 3(1) of these Principles, ‘relevant priority needs’ include all of the following priority needs:
- the priority needs of the person;
- the priority needs of each child of the person;
- the priority needs of the person’s partner; and
- the priority needs of any other dependant of the person.
(‘Priority needs’ are defined in detail in section 123TH of the Act.)
This consideration reflects the expectation that a person will use their income, including income in the form of income support and family assistance payments, to meet their priority needs and the priority needs of their dependents. However, paragraph 5(1)(b) explicitly recognises that the goal of meeting all of these priority needs may not always be achievable where a person has limited financial resources.
Subsection 5(3) provides that, if the Secretary is satisfied that the person is applying appropriate resources to meet the person’s relevant priority needs, the Secretary is not required to consider any of the matters mentioned in paragraphs 5(1)(c) and (d).
The third requirement under paragraph 5(1)(c) of the Principles, is that the Secretary must consider whether income management under the new measure is an appropriate response to the indicator or indicators of vulnerability that the Secretary has identified in relation to the person, as part of his or her consideration under paragraph 5(1)(a) of the Principles. The fourth requirement, under paragraph 5(1)(d), is that the Secretary must consider whether income management under the new measure will assist the person to apply appropriate resources to meet some or all of the person’s relevant priority needs. (As mentioned above, because of subsections 5(2) and (3), the Secretary is not required to consider these 2 matters if the Secretary is satisfied that the person is not experiencing an indicator of vulnerability or if the Secretary is satisfied that the person is applying appropriate resources to meet their priority needs.)
Subsection 5(4) sets out particular matters that the Secretary must have regard to as part of his or her consideration under paragraphs 5(1)(c) and (d). Those matters are the personal circumstances of the person and any programs or services (however described) that are available to the person (or that could be made available to the person).
Under Part 2, it would be possible for the Secretary to conclude, in a particular case, that even though the person is experiencing an indicator of vulnerability, income management is not an appropriate response to those circumstances given all the factors in the particular case. In such a case, provided that the Secretary has complied with the relevant decision‑making principles by considering the various matters that he or she is obliged to consider under section 5, it would be open to the Secretary to decide not to make a determination that the person is a ‘vulnerable welfare payment recipient’ under subsection 123UGA(1) of the Act.
For example, in a particular case, the Secretary may conclude that income management will be an effective tool to reduce the likelihood that a person who is experiencing financial exploitation will be subject to harassment and abuse in relation to their welfare payment, by protecting a portion of the person’s welfare payments for expenditure on priority needs. However, in another case, the Secretary may conclude that income management will not reduce incidences of harassment and abuse, and that the person requires a different form of assistance – for example, assistance to change their living arrangements, or to obtain an intervention order from a court. Alternatively, the Secretary may conclude that income management used in conjunction with another form of assistance is appropriate.
Section 5 provides the Secretary with the flexibility to consider the totality of the person’s personal circumstances, and any other avenues of assistance that may be available to the person, in deciding whether income management is an appropriate response to the concerns that have been identified as part of the Secretary’s consideration under subsection 5(1).
As provided for in subsection 5(5), the Secretary is not limited by subsection 5(4). That is, in considering whether income management under the new measure is an appropriate response to the indicator or indicators of vulnerability that have been identified in relation to the person and whether it will assist the person to apply appropriate resources to meet some or all of the person’s relevant priority needs, the Secretary may have regard to other matters that he or she becomes aware of during the process of consideration. However, the Secretary must have regard to the matters set out in subsection 5(4) as part of that process.
Section 6 sets out a defined term, ‘current determination’, that is used only in Part 3 of the Principles. ‘Current determination’ means a determination (made under subsection 123UGA(1) of the Act) that is in force in relation to a particular person and that states that the person is a vulnerable welfare payment recipient.
Subsection 7(1) lists the matters that the Secretary must consider in making a decision about whether to vary or revoke a current determination about a person under subsection 123UGA(5) of the Act. Subsection 7(1) is expressed to be subject to subsections (2), (3) and (4).
The effect of subsections 7(2) and (3) is to limit the circumstances in which the Secretary is required to consider all of the matters set out in subsection (1), while subsection 7(4) provides that the Secretary is required to have regard to certain matters as part of the Secretary’s consideration under subsection (1). These requirements are explained in more detail below.
The first and second requirements, under paragraphs 7(1)(a) and (b) of the Principles, are that the Secretary must consider whether the person is experiencing an indicator of vulnerability, and whether, if the current determination were to be varied or revoked (whichever is proposed), the person would be likely to experience an indicator of vulnerability (as defined in subsection 3(2)).
Paragraph 7(1)(b) requires the Secretary to consider the likely effect of any variation to, or revocation of, the current determination because, in some cases, it will be possible that one of the reasons that the person is not experiencing any indicators of vulnerability at the time of the Secretary’s consideration is because of the effect of income management. In such a case, it might be appropriate for the person to continue to be subject to income management under the new measure, even though the person is not currently experiencing an indicator of vulnerability.
Subsection 7(2) provides that, if the Secretary is satisfied that the person is not experiencing an indicator of vulnerability, and is not likely to experience an indicator of vulnerability if the current determination is varied or revoked (whichever is proposed), the Secretary is not required to consider any of the other matters mentioned in subsection 7(1).
The third and fourth requirements are set out in paragraphs 7(1)(c) and (d) of the Principles.
Under paragraph 7(1)(c), the Secretary must consider whether during the period in which the current determination has been in force, income management under the new measure has assisted the person to apply appropriate resources to meet some or all of his or her relevant priority needs. If income management under the new measure has not assisted the person to do this, then another service or program (however described) may be a more appropriate response or may need to be used in conjunction with continuing income management arrangements.
Under paragraph 7(1)(d), the Secretary must consider whether, if the current determination were to be varied or revoked (whichever is proposed), the person would be likely to not apply appropriate resources to meet his or her relevant priority needs. If this were the case, income management may continue to be an appropriate response to the person’s circumstances.
Subsection 7(3) provides that, if the Secretary is satisfied that, if the current determination were to be varied or revoked (whichever is proposed), the person would be likely to apply appropriate resources to meet some or all of his or her priority needs, the Secretary is not required to consider the matters mentioned in paragraphs 7(1)(e) and (f).
The fifth requirement, under paragraph 7(1)(e) of the Principles, is that the Secretary must consider whether income management under the new measure is an appropriate response to the indicator or indicators of vulnerability that the Secretary has identified in relation to the person, as part of his or her consideration under paragraphs 7(1)(a) and (b) of the Principles. The sixth requirement, under paragraph 7(1)(f), is that the Secretary must consider whether income management under the new measure will assist the person to apply appropriate resources to meet some or all of the person’s relevant priority needs. (As mentioned above, because of subsections 7(2) and (3), the Secretary is not required to consider these 2 matters in certain circumstances.)
Subsection 7(4) sets out particular matters that the Secretary must have regard to as part of his or her consideration under paragraphs 7(1)(e) and (f). In particular, the Secretary is required to consider the likely impact of any variation to, or revocation of, the current determination on the person, and on any specified dependent of the person. Income management under the new measure may have had a direct effect not only on the person who was subject to income management, but also on dependents who have benefited from the income management arrangement being in place in relation to the person.
As provided for in subsection 7(5), the Secretary is not limited by subsection 7(4). That is, in considering whether income management under the new measure is an appropriate response to the indicator or indicators of vulnerability that have been identified in relation to the person and whether it will assist the person to apply appropriate resources to meet some or all of the person’s relevant priority needs, the Secretary may have regard to other matters that he or she becomes aware of during the process of consideration. However, the Secretary must have regard to the matters set out in subsection 7(4) as part of that process.
Section 7 provides the Secretary with the flexibility to consider the totality of the person’s personal circumstances, and any other avenues of assistance that may be available to the person, in deciding whether income management is an appropriate response to the concerns that have been identified as part of the Secretary’s consideration under subsection 7(1). In particular, subsection 7(4) provides the scope for the Secretary to consider changes that might have occurred to a person’s circumstances since the current determination was originally made, and any services that may be available to the person that were not available at the time that the current determination was originally made, and to consider whether the determination should be varied or revoked in light of those changes.
Consultation
Consultation on these Principles was undertaken with the Department of Education, Employment and Workplace Relations to ensure a co-ordinated approach in respect of welfare payments, for which each Department has responsibility, which may become subject to the income management regime. Centrelink was also consulted on the Principles.
Regulatory Impact Analysis
These Principles do not require a Regulatory Impact Statement or a Business Cost Calculator Figure. These Principles are not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.